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Reimbursement and Pay-for-Performance in Health Care

Paper type: Essay
Pages: 6 (1423 words)
Categories: ,Health,Health Care,Job Satisfaction And Work Performance,Medicine,Services,Therapy
Downloads: 41
Views: 314


There is a growing trend in the United States called pay-for-performance. Pay-for-performance is a system that is used where providers are compensated by payers for fulfilling specific pre-established steps for quality and performance (What is Pay-for-Performance, n.a.). We are going to be discussing what pay-for-performance is. There are different aspects of pay-for-performance which include; the results of compensation by this approach, the impact cost reductions has on quality and performance of healthcare, the affects to the service providers and patients, and the results on the future of healthcare.


Pay-for-performance (P4P) and value-based getting are terms that can be heard within the healthcare market which, describes payment systems that reward doctors, health centers, and other health care service providers for their quality and performance. The goal of pay-for-performance (P4P) initiatives is to connect reimbursement to quality of health care along with decrease systemwide costs (Shi & & Singh, 2012). Government firms along with private health plans are in the procedure of developing programs in intend to encourage health centers, physicians, and other suppliers so that they will begin to satisfy the quality of requirements and attain the ideal outcome for patients.

The total goal for pay-for-performance is to increase the quality of healthcare, while lowering the medical costs by implementing programs that will concentrate on things such as preventative care which would consist of services such as annual exams and vaccinations.

Measurements and Incentives

When it comes to quality of care measurements there are different categories one of which being structure. The structure measures patients access to health care, the use of electronic systems and the patients experience of the care that they received. Incentives can be either financial incentives or non-financial incentives. Pay-for-performance has quite a few pros because it helps increase the motivation of the physician or health care facility which in return will how the company that the individual care for their job and wants to be rewarded based on their good behavior and quality of care that they provide the patient with. There can be a con when it comes to pay-for-performance which would be that if the physician or staff does not have the proper knowledge, training, and experience then they might not be able to reach or exceed the goals that have been set. When the proper knowledge, training, and experience is an issue than this can cause the company to have to invest money into getting that individual the training and resources that they need to obtain the set goals.

How Reimbursement is Affected

When it comes to the pay-for-performance programs they have been introduced to the health care system to offer incentives to physicians, hospitals, and other medical facilities however the underlying structure of the payment system already generates a lot of incentives on its own. Currently in the United States a majority of physicians are paid on a fee-for-service basis, which in returns encourages a high volume of services, without regard to the value of the service to the patient. In the health care industry there are services that after they are performed the reimbursement is more generous on the payout than others.

The pay-for-performance can alter the current incentives that physicians, hospitals, and other medical providers already receive. Reimbursement has affected the pay-for-performance in a positive way because health care providers are able to financially gain from it for providing their patients with quality health care services. Reimbursements are reinventing the way that health care is going to be delivered because health care providers are going to be able to amplify their profit through improving their quality of care, instead of it being the fee-for-service quantity.

Pros of Pay-for-2Performance for Patients

When patients see physicians who are part of the pay-for-performance program this can be beneficial for them. The reason that patients see benefits is because the physician will work with the patients individually to get better health care results for the patient. If a patient has high blood pressure then the physician will focus on that issue and will work with the patient to get it back to normal which in return the physician will see an incentive for this and the patient wins as well because they are getting the treatment that they need and their overall health is going to increase as a result of the services provided.

System Cost Reductions

The system costs reductions will have a positive impact on the quality and efficiency of health care. A lot of analyst have worried that the Affordable Care Act will weaken the quality and efficiency in health care because there will be way more patients and not enough quality health care providers. According to Agency for Healthcare Research and Quality (n.d.): In 2000, health care spending rose to $1.3 trillion dollars, or an average of $4,637 per person. As a percentage of the Gross Domestic Product (GDP), it grew from 13.1 percent in 1999 to 13.2 percent in 2000. National health expenditures are expected to reach $2.8 trillion in 2011, with an average annual growth rate of 7.3 percent from 2001 to 2011. By growing 2.5 percent faster that then the GPD, expenditures will consume approximately 17 percent of the GDP in 2011(para. 6).

Affects on providers and Customers

Pay-for-performance affects health care providers and their customers in a positive aspect because it improves the quality of health care that they receive from their physician which in return increases value. The pay-for-performance program will take health care from basic health care delivery to high-quality health care delivery. The way that this is going to affect the patient “customer” is because they are going to have an overall better experience with more attention to their overall health. The patient will also see benefits because there are incentives for patients when they live a healthy lifestyle. One of the incentives that the patient will see is in cost savings in the immediate future.

Pay-for-performance is positive for all stakeholders involved within the program because it delivers on the main goal which is to increase the quality of care to patients while reducing the costs. The pay-for-performance will also help health care providers to establish more rapport and generate a good feedback within the community because when their patient receives quality health care services then the patient is going to go back and tell their family and friends about their positive experience and recommend that health care provider to their loved ones.

Effects on Future Health Care

Pay-for-performance programs are expected to expand across the United States health care in the near future, especially with the implementation of the Affordable Care Act. The pay-for-performance is going to continue to increase the quality of health care that the patient receives from their health care provider. Pay-for-performance is eventually going to be all across the United States and more medical professionals are going to be participating within this incentive program which is going to start making health care affordable for many Americans who cannot afford health care coverage and or services. In the future we are going to start seeing healthier Americans because they are going to get health care services that are tailored solely on their health care needs. Doctors are going to start working to provide quality care in order to get their patients healthier whether it be getting their weight under control, blood pressure, and various other illnesses.


Pay-for-performance and reimbursement is changing the health care delivery system into a more cost efficient health care system that before. This is going to improve the quality of care that one receives because it steers away from the fee-for-service and gives physicians motivation to provide their patients with a better quality of car because of the incentives that they will receive. There are going to be many baby boomers that are going to start requiring more health care services and with this pay-for-performance implementation it is going to give them a better quality of care than in previous years. With the pay-for-performance incentives this is going to motivate doctors to get their patients in overall better health which in the future we will probably start seeing a decrease in chronic illnesses as patients will be working towards a better and healthier lifestyle.


  1. Agency for Healthcare Research and Quality (n.d.) http://www.ahrq.gov/research/findings/factsheets/costs/costria/index.html
  2. Rosenthal, M.B. (2006). How Will Paying for Performance Affect Patient Care?. Retrieved from http://virtualmentor.ama-assn.org/2006/03/pfor1-0603.html
  3. Shi, L., & Singh, D. A. (2012). Delivering health care in America: Health Policy (5th ed.). Boston, MA: Jones and Bartlett. Retrieved from The University of Phoenix eBook Collection database.

Cite this essay

Reimbursement and Pay-for-Performance in Health Care. (2016, Jun 13). Retrieved from https://studymoose.com/reimbursement-and-pay-for-performance-in-health-care-essay

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